Pulte posts big loss after charges

By Ilaina Jonas

NEW YORK (Reuters) - Some of the biggest U.S. home builders reported large quarterly losses on Wednesday on big charges for lower property values and said orders continued to crumble, underlining the weaker U.S. housing market.

Pulte Homes Inc (PHM.N), the No. 3 U.S. home builder, posted a quarterly loss on Wednesday, on charges topping $1 billion and said orders fell 37 percent. The billion-or-so charge puts Pulte's write-downs and write-offs in the same ballpark of Centex Corp (CTX.N), the No. 4 U.S. home builder, and D.R. Horton Inc (DHI.N), the largest U.S. home builder, which reported a billion-plus charge last quarter.

On Wednesday, M.D.C. Holdings Inc (MDC.N), the No. 10 U.S. home builder posted a net loss of $155.4 million, or $3.40 a share, after posting charges of about $254 million. At No. 8, Ryland Group Inc (RYL.N) reported a loss of $54.7 million, or $1.30 per share, after charges of $128.1 million.

Pulte reported a third-quarter a net loss of $787.9 million, or $3.12 a share, compared with a net profit of $190.2 million, or 74 cents per share, last year.

The third-quarter 2007 results include $1.18 billion, or $3.33 per share, in charges for impairments, write-downs and write-offs related to declining property values and goodwill.

Although Pulte's is big, on a percentage of inventory, it brings the Bloomfield Hill, Michigan-based home builder in line with other large builders, JMP Securities analyst Jim Wilson said.

"The question is how much more is there to go," Wilson said. "We think there are signs that inventory is starting to find a peak, but there's defiantly impairments to go."

Pulte said its quarterly revenue for the quarter fell 31 percent to $2.5 billion the prior year, Pulte said. The company sold 7,468 homes, down 28 percent, and the average sale price fell 4 percent to $322,000.

Net new home orders fell 37 percent to 4,582 homes, with their value tumbling 47 percent to $1.3 billion.

"The operating environment continues to be challenged with elevated levels of new and resale home inventory, tightening of mortgage liquidity and weak consumer sentiment for housing," Richard Dugas Jr., Pulte chief executive, said in a statement.

The U.S. housing-building sector has been in decline for more than a year and a half.

Beginning when buyers balked at rising prices in some markets, the problems have been compounded this year by defaults on subprime mortgages.

A tightening of credit standards, even for borrowers with good credit scores, a glut of homes for sale and buyer concern about economic weakness has added to the gloom.

The National Association of Home Builders said recently its index of home builder confidence sank to a record low of 18 in October, the worst since the gauge began in 1985.

In September, U.S. housing starts and permits fell to their lowest in more than 14 years. The pace of sales of existing single-family homes fell to its lowest level since the National Association of Realtors began tracking the figures in 1999, and the median price was off 4.9 percent.